Weekly cryptocurrency analysis from David Thomas, Director and Co-Founder of GlobalBlock

2019 is a week old and following the “Santa-rally” that we saw just ahead of Christmas, cryptos have by and large held their ground over the New Year period with some respite from the bear market movement that we have seen over the last number of months. Probably the most marked improvement over the holidays was Ethereum which has now climbed over 83% in the last month and pushed itself back into the number 2 spot ahead of Ripple (XRP). On the BTC front, whilst the $4,000 level was breached once again, it hasn’t now shown immediate signs of pushing on, which has meant that the last couple of weeks has seen it wavering in and around the $4,000 mark.

Whilst those within the crypto space are perennially optimistic on the long term success of the sector and hopeful of a solid recovery in 2019, broader macro-economic factors could interfere with these plans with various well documented issues rumbling on and showing no definitive end in sight. If this is the case and global markets come under pressure, then there is argument to say that risk aversity will increase and this could supress expected investment levels into the sector, thereby stifling its growth.

One thing is for certain, 2019 is going to be another year of blockchain being talked about, written about and gaining more traction in the wider media and this will naturally lead to more widespread education on exactly what it is and how it is going to benefit and change our futures.

BTC Price: $4,079

Last 7 Days: +6.69%

1month: +20.04%

12months: -76%

BTC Commentary

With BTC yet to show any real grip above the $4,000 level, there is still much market comment that the bear market is still apparent and yet to show signs of complete exhaustion and turnaround. The last month has seen the overall BTC price recover by over 20%, and whilst the bears are less vehement that an imminent “zero” is coming, few are willing to make a call on the short-term direction for Bitcoin. As muted before, much of 2019 for BTC is going to rely on institutional money entering the market, which will go hand in hand with improved regulation and the much speculated ETF sign-off. Both of these points should be resolved in 2019- regulation has already been sign-posted and with the ETF story rumbling on, there will surely come a point this year when it is either “passed” or is deferred for a substantial period of time. Either way- some clarity on these issues should be had this year and that will then determine (along with broader macro-economic factors) what sort of year the BTC market has.

The past month has proven to be hugely positive for Ethereum with almost an 84% improvement in the price from what was deemed at the time to be a price that hugely undervalued Ethereum. It has been acknowledged by the founders of Ethereum that the days of ridiculous spikes in price were most likely behind us but there are still many who feel that with the impending Constantinople fork and long term potential of Ethereum, there is still substantial upside to be seen.

With Constantinople due to be taking place on the 16th Jan, it could be a very interesting month for Ethereum, one that could help make additional gains to its price, or as can tend to happen in these situations, become a case of “buy the rumour, sell the fact.”

Past Week Talking Points

· Digital assets platform Bakkt, which has been created by the operator of the New York Stock Exchange (NYSE) has raised $182.5 million from its first round of funding. Investors include Galaxy Digital, Boston Consulting Group, ICE, Alan Howard, Horizons Ventures and Microsoft’s venture capital arm.

· The total number of cryptocurrencies with a measurable market cap now sits at over 2,000 according to CoinMarketCap.

· “Bitcoin is different because Bitcoin is decentralized. The advantages of decentralization are often subtle and easy to dismiss, but they are real benefits,” Jimmy Song -Bitcoin developer.

· In the past year from Dec’17 to Dec’18, Bitcoin has been reported as “dead” in the world media almost 100 times according to crypto information site 99Bitcoins.

· The Financial Services Agency of Japan is considering approving Exchange Traded Funds (ETFs). The Financial Regulator is currently gauging interest in the sector according to Bloomberg.